LPG: Jan 5-7: Prices up further on increasing propane demand
CFR Far East
The CFR Far East market gained further last week on the back of growing demand. Rim Asia Index for propane and butane was at $758.00 per metric ton (/mt) and $728.00/mt as of Jan 6, up $9.75/mt and $4.75/mt respectively from Dec 24. With increasing propane demand in winter, several buyers were looking for pure propane for February delivery at levels equivalent to $754-755/mt in the spot market. In addition, supply for cargoes containing butane was seen to be abundant. One European trader seemed to have sold even-split cargoes ex-Middle East on a CFR China basis.
FOB Middle East
The January CP was set at $740/mt for propane and $710/mt for butane. With a gain in crude prices at the end of December, the level was above market expectations. The February CP was forecast to be at about $735/mt for propane and about $705/mt for butane. In the spot market, talks for 44,000mt 50:50 cargoes for February loading were reported at a discount of $20-25/mt to the February CP. One European trader bought a similar cargo in the middle of last week. As for supply, two Middle East gas producers as well as two traders were seen to have spot availability for January to February loading. Nevertheless, some of them were said to have been already sold.
Asia Pressurized Market
For FOB South China market, some importers from South China could apparently sell cargoes for second-half January loading at a premium in the low $30's/mt to the January CP. On term discussions for CFR Vietnam, one importer from Haiphong concluded term contracts for 2022 with term suppliers at a premium of $108/mt to the CP.